CitiFinancial lawsuit, need BK and Attorney

[BlueBayou]

Okay, my Brother was thinking he would have had a little more time before getting an attorney.

CitiFinancial ( $6k unsecured ) filed a lawsuit after being only 2 months past due. That's really fast. I thought they would at least get to the charge-off stage. They are located about 10 minutes from us.

County records indicate a "Summons and Order to Appear for Pre-trial Conference" issued 08/11/2009, with the Pretrial Date Set of 09/09/2009.

Brother hasn't received the actual "Summons" as of yet.

However, they filed in "Small Claims" and should have filed in "County Civil".

He's not going to bring that point up. Hopefully, the Judge will dismiss it and they will have to refile, thereby affording my brother additional time.

My brother is "self employed" and basically has very few jobs to cover bills. He wants to file Bankruptcy and needs to wait until October to meet the means test for Chapter 7.

However, he may not qualify----------

...as he has several mortgaged (just above the market value) "occupied" rental properties.

...and has 3 vacant properties jointly owned with a "dirt bag" half brother, free and clear...2 of which he will let the "trustee" take, and 1 that he would like to keep.

He wanted to approach the half brother with an offer where he would quit-claim the 2 (Market Value 85k) to the half-brother in exchange for a quit-claim on the 1 property that he would like to keep (Market Value 18k).

My brother and his "half brother" are not on good terms as he has scammed my brother out of quite a lot of money on a couple of "spec homes" which has contributed to the need for filing this BK. He really does not want to talk to him. He has been made aware of the intended BK.

Anyway, knowing the BK laws regarding property exchanges, I have voiced my concern that that is not the way to go.

So, I guess the "trustee" can do whatever he wants with it. In this instance, we figure "paybacks are hell".

....My Brother also has 2 older vehicles - no liens, one is for his business and one for personal, but, both are registered in personal. Since we are in Florida with very low vehicle exemptions, he may lose one.

....He has about 80k in unsecured business debt and 50k in unsecured personal as well as some medical debt.

So, If CitiFinancial files and gets a "judgment", which we are sure that they will..........Will they try to seize the unsecured assets immediately.

Will getting an attorney on retainer put a hold on things? Or is it too late?

One other reason he wanted to wait on filing is that he has a 2007 pending lawsuit that his daughter filed against him, which is a personal injury boating accident that hopefully will be dismissed.

Right now he is pretty sick and I am trying to help as much as possible.

He is married, wife can't drive (doesn't know how), but works at a hospital making pretty decent wages.

So, any advice on the property situation would be helpful.

[HMT]

Wow! I have 2 6k unsecured citi loans that I stopped paying on in March and they only sent it over to NCO.

[BlueBayou]

Wow! I have 2 6k unsecured citi loans that I stopped paying on in March and they only sent it over to NCO.

That's what we have mostly heard.

This is kind of weird.

Also, they pulled a "full" credit report 2 weeks ago.

[BlueBayou]

Does anyone know how aggresive CitiFinancial is after they have received a judgment?

[HMT]

I really wish I could offer you more but I'm a sitting duck with them myself.

Heather

[StartingOver08]

OP, Citifinancial obviously knows your brother has some assets. If they smell assets, they go to suit faster, IMO.

You are right about the property transfers - don't do it. The look back period is 10 yrs. However, since he owns the homes free and clear, why doesn't he sell them and clear this debt without filing BK. Maybe I missed something in your post, but you said:

short version: several properties rented that are under water and three properties free and clear. The properties are owned jointly by your brother and a half brother.

These properties sound like investment properties. Does your brother own any property that is a homestead property? Is it owned free and clear or is it upside down?

With three properties that are free and clear, your brother may be able to work out of this without the BK. It is not possible to know without more detail. But from what you posted, all the free and clear properties would go to the Trustee for payment of the BK estate. At least the portion that is owned by your Brother. Your brother would be better served if he could achieve the same thing without being under the watchful eye of the Trustee. Remember, the Trustee gets a large commission on every asset they can recover for the creditors.

The business is also an asset of your Brothers and that would come under the Trustee's perview even if your Brother files personal BK and not a business BK.

The vehicles that are owned F&C also would belong to the BK estate (the value over the exempted portion).

It is really hard to tell from what you posted, but it sounds like there is more than enough for the trustee to liquidate to pay off the creditors - or at least pay a good chunk.

Your brother may want to consider working out payments with Citi before it goes to judgment. JMO.

[music12]

that half-brother is going to be very unhappy when the trustee sells these F&C properties and gives him probably less than half the proceeds. it's better for the half-brother to agree to sell things than to be dragged into the brother's bk. somebody needs to explain that to him.

meanwhile, if possible i would remove all money from bank accounts to protect from citi seizure.

[BlueBayou]

Here's another problem that I am barely able to comprehend------

In 2006 my brother refinanced his home to get rid of predator lender Ameriquest.....another bad move as he had to tack on 20k of pre-pay penalties to the loan.

Here's the stickler.......his Home mortgage (Capital City) is $140k.

His 08/2009 Market Value - according to the newly posted tax record is.... $19k.

He also has a maxed out 50K HELOC on another property owned jointly with his ex-wife, wife's name listed first. Current MV is $50,289.00. House is currently rented.

2 years ago, he was notified by the County that he had been claiming "Homestead Exemption" on both properties and was allowed only one.

So, he took the "Homestead Exemption" off the house he's living in.

As far as trying to sell any properties, he's been trying to....they,ve been up for sale for 3 years and no bites, not even calls.

We live in what Experian calls "indigent" county and nothing is selling.

One of the two properties that he wanted to quit-claim to his half-brother is in a drug-infested neighborhood and how/why the county thinks it's worth 80k is beyond me. I think they had it rented last year for $250.00 month, but, the renters trashed it and set up a nice little meth lab in it. I think it should be condemned. It is now vacant.

One other bad note is that his half-brother traded one of the spec-homes last year for another home which he put in to his new wifes name and also received $80k cash of which my brother only received $1,400 which went towards paying past due taxes on the property he would like to keep. My brother was expecting half of the sale proceeds to pay his debt. Needless to say he was devastated when he went to closing. He also was unaware of the trade until I brought it up in County Records 2 months ago.

I begged him not to let this go. He wants out from under any dealings with the half brother and just doesnt know what to do. He has lost so much money and is now in ill health.

He would be better just walking away from all of it and let the "Trustee" deal with it.

I would love to have the "Trustee" demand 1/2 the sale proceeds back. That would be "sweet justice".

My brother went through a bad divorce in 2004 and had to pay about 60k debt. He only had about $6k left on it.

Then in 2007 he took his daughter and her family whom he hadn't seen in 4 years for a boat ride during "scallop season" and after trying to avoid a head on collision hit a piling in the Gulf of Mexico. His 6 year old granddaughter suffered a mild concussion and his daughter got a broken arm after her husband fell on the both of them from the impact. My brother was ejected and hit the piling and suffered a broken neck. Whole front end of boat demolished. My brother does not drink and never has. It was ruled an accident and my brother was not cited.

However, when the family got back to Alabama they contacted a lawyer and filed suit against my brother.

Prior to them leaving, he paid for their medical attention and gave them money and loaned them another car to get home as their car blew the engine on the way down.

I have never seen my brother cry until that day, as he loved his daughter and grandchildren and couldnt stand to see them hurt.

They are all fine now.

It was a couple of months after the accident that my brother received the summons. That case is in limbo and I just received word a couple of weeks ago that the daughter is having the case dropped.

He was unable to work until the following year.

Anyway, if the "Trustee" looks back 10 years, then he would look at the Real Estate transactions for the past 5 years that involved the half brother.

Maybe.........we can use that as leverage and possibly have an attorney write up some kind of proposal.

As far as the CitiFinancial thing, I've already told him to closeout the personal bank account and hide one of the cars until he gets to the pre-trial conference. I'm sure it will be dismissed, but immediately refiled, which will buy some time.

We would prefer not to BK, I just don't know if that is possible. He is planning on closing his business in a month or so and just keep the rentals.

[JRScott]

As someone said above, they are well aware of his assets and that is why they are suing now.

Transferring the properties out of his name now will only have a trustee reverse it later.

However if he sold his interest in one of the properties to the half brother for fair market value he could use that money to pay off citi and perhaps help him get his finances in order. Hard to say with so much, with so much property held by multiple people if he is going to do bankruptcy he will need a lawyer, and a good one.

[LuciluS]

Sounds like your brother has been through the wringer more than once.

Since his-half brother has already put the screws to him on the selling of that house where your brother only got $1,400, and they are not on the best of speaking terms, If I were in his shoes, I'd file the BK and let the Trustee deal with the half-brother.

Sure hope the hearsay on the daughter dropping the case is True for your brother's sake. That lawsuit needs to be dismissed before your brother files BK as it would/could hold up your brother's BK.

Try to approach your brother with this:

Filing Bankruptcy is a Business Decision and Emotions need to be left out of such decision.

Sounds like you are a Good Brother and I wish you both the best of Luck.

Luci

[music12]

why would the daughter's lawsuit hold up the bk? it would get discharged along with everything else.